Editorial May 2008

by Jan Scholten

Medicine and economics

We can look at medicine from many different points of view. In the April editorial we looked at it from the point of freedom of the patient. This time I want to consider medicine and the position of Homeopathy from the point of view of economics.

In order to to get the best results economically there must be a free market where different kinds of medicine and therapists will compete on equal ground. This is little disputed under economists. It will produce the best results in general for everyone, but the condition is, that the market is really free and not disturbed by factors that distort it. However, there are many factors that can indeed distort a free market.

The first distorting factor is scarcity power. This means that one person or company has the possession of something needed that others do not have. That person or company can thus raise the price because there is no competition. In medicine this can mean the quality of a special doctor, but it can also mean the patent of a pharmaceutical company on a certain drug. This last state is very common in medicine. The typical situation in homeopathy is that there are no patents. Natural substances are used and the knowledge is common, so there are few patents and the homeopathic companies have little extra profit to impact the market with advertising.

A second factor is inequality in information. This is a very strong feature in medicine. Most patients know very little about health and disease and very often have to rely completely on the opinion of a doctor or knowledge offered by pharmaceutical companies. The information in the media is an even stronger factor in the imbalance especially between the different forms of medicine. Regular medicine gets much positive covering in journals and television, whereas alternative medicine gets little or only negative coverage. A salient example of this is a situation in the Netherlands. For several years the case of Sylvia Millecam has been highlighted in the media. This "scandal" continues to blame the alternative therapists for letting Sylvia die from breast cancer and preventing her from getting chemotherapy and radiation. It is suggested that all alternative doctors are quacks that advise patients not to go to normal doctors, but it is an indisputable fact that it was the choice of Sylvia Millecam herself to refuse chemotherapy and radiation. In contrast the estimated 1,750 patients killed each year by regular medicine hardly gets coverage in the media. So, 1,750 patients dying from normal medicine is less of an issue and offence than one patient dying of her own disease in treatment by complementary medicine. There is obviously something biased in the information being given in the media.

A third factor is the method of payment. This differs in all countries, but the Netherlands has a good example. The patients have an obligatory insurance which covers most of regular medicine. The insurance companies pay for the treatments and the patient may never see the bill. For complementary medicine the patients can take out extra insurance for which they have to pay an extra amount each year. Then they pay for the complementary medicine and get the amount totally or partially reimbursed, depending on the kind of insurance. This situation gives regular medicine an enormous advantage as it doesn't cost the patient anything. He doesn't even know what the treatment costs. For complementary medicine the patient sees what it costs, he has to pay for himself, which he gets (partially) reimbursed and he has to pay an extra insurance.

From these considerations it will be clear that medicine is not an economically sound system. Competition is unfair and out of balance. The patients are poorly informed and can hardly make a sound judgement. There is a lot to be improved.